B.C. leads country in new ‘foreign’ millionaires

Wednesday, June 12, 2013

By Brian Morton, Vancouver Sun

A new BMO Harris Private Banking survey has found 68 per cent of high-net-worth British Columbians — those with investable assets of $1 million or more — were either born outside of Canada or had at least one parent born outside the country. (Pawel Dwulit/Bloomberg)

When it comes to immigrants as new millionaires, British Columbia leads the country.

That’s one of the main findings of a new BMO Harris Private Banking survey that found 68 per cent of high-net-worth British Columbians — those with investable assets of $1 million or more — were either born outside of Canada or had at least one parent born outside the country.

That compares with 48 per cent nationally.

“I think this reflects on the improving window on the world that B.C. has,” John Bathurst, the company’s vice-president of trusts and investments, said in an interview Wednesday. “We attract people from other countries and they’re contributing to the economy by creating wealth.

“A very high percentage of people in B.C. are from the Pacific Rim (and) a number of those people are attracted here to do business.”

However, the survey also noted that B.C. has one of the lowest percentages of female millionaires — 26 per cent versus 32 per cent nationally. More of B.C.’s millionaires are self-made, however — 74 per cent compared to 67 per cent nationally.

Almost half of B.C. millionaires have investable assets of $2 million or more, the highest proportion in Canada. Three-quarters of B.C.’s high-net-worth population reported that “wealth was primarily generated by me,” four per cent said “wealth was primarily generated by my spouse,” and 21 per cent said “wealth is partly inherited and partly self-made.” Nationally, about two-thirds of millionaires were self-made.

The online survey was conducted between March 28 and April 11 with a random sample of 305 Canadian adults who have at least $1 million in investable assets, which includes savings and retirement plans but excludes money in an employers’ retirement plan, insurance products and their home.

Jock Finlayson, executive vice-president of the Business Council of B.C., said the survey backs up strong impressions that immigrants are attracted to the B.C.’s “fertile environment” for entrepreneurial activity and that there’s a “high propensity to form new businesses.”

He noted that while most immigrants to B.C. aren’t affluent, a small subgroup is.

“This highlights the fact that there’s a group of immigrants with significant wealth when they immigrate to Canada. And this confirms that B.C. is attracting a disproportionate share of the affluent segment.”

According to the report, 67 per cent of the Canadian millionaires who are either immigrants or first-generation Canadians say their wealth is self-generated.

Although the B.C. numbers are lower, women nationally represent one-third of those with a net worth topping $1 million — up from just 21 per cent three years ago.

“Women are more empowered, more knowledgeable and more interested in personal finance now (than in the past),” said Yannick Archambault, vice-president and chief operating officer of BMO Harris Private Banking. He describes the trend as the product of educational initiatives promoting women in business, increased female interest in financial markets, changes to family structure (more men staying home with the kids), and government policies encouraging equality.

Finlayson doesn’t agree with the survey’s findings that women are under-represented as millionaires in B.C.

“I don’t see any barriers specific to B.C. that would make it harder here than other parts of Canada (for women). That’s not consistent with what I’ve seen in the marketplace, which is that (B.C.) is a pretty good place for both genders.”

Finlayson noted that while the survey does provide some raw data, he believes its size — 305 people surveyed nationwide, 47 in B.C. — suggests people should be cautious about drawing conclusions from it.

According to Pollara, which conducted the survey, the margin of error for a sample of this size is plus or minus 4.5 per cent, 19 times out of 20. BMO also noted that the survey was taken of a “very specific segment” of the population.

The study is the first in a series being released by BMO Harris Private Banking over the next year examining trends among the wealthy across North America.